Lancia will
receive a significant boost to its dealer network and
gain a vital footprint in markets where it has struggled
to make an impact, when its dealer network is combined
with Chrysler’s and the U.S. brand is phased out of
mainland Europe. That could add up to as many as 200 new
showrooms for the prestigious Italian brand once the
shakeup takes place next year, according to a report in
Automotive News Europe.
Chrysler Group’s European distribution and retail network has recently
come under the control of Fiat, as it has in countries
around the world outside its key domestic U.S. and
Canadian markets. According to ANE, 1,150 Chrysler and
Lancia dealers have now been sent letters informing them
that their contracts will be terminated as the Fiat
Group prepares to shakeup the network and rationalise it
into a single integrated business next year. The
timeline is due to EU rules that stipulate a dealer must
be given 12 months notice of contract termination.
Lancia will
remain the nameplate sold in mainland Europe while the
Chrysler badge will survive in the UK and Ireland, where
Lancias have not been sold since the end of 1993. In
these latter two markets both Lancia and Chrysler have
poor reputations with consumers, so Chrysler receives
the nod due to being the incumbent. Lancia sold a total
of 121,000 cars last year in Europe, but almost
five-sixths of all its sales came from its domestic
market, Italy, meaning the additional dealers it
acquires from Chrysler will give it much greater and
pinpointed European penetration. Chrysler’s European
sales by contrast barely nudged into five figures last
year. Fiat Group CEO Sergio Marchionne is targeting
combined sales of 300,000 units from Lancia and Chrysler
by the end of his latest business plan’s remit in 2014,
although this figure evokes memories of his last 300,000
target for Lancia by 2010 which will be missed by a
large margin.
Along with an
increase in its dealers numbers will come a doubling of
Lancia’s range from four to eight models. There will be
replacements for the current models in the form of the
next-generation Ypsilon, due in 2011, and a new minivan
from Chrysler to replace the current PSA
joint-venture-sourced Phedra, while the Italian brand’s
range will be padded out by fresh models including
Chrysler’s new D-segment replacement for its unloved
Sebring and its next 300 series flagship sedan. Fiat
Group Automobiles’ sales chief Lorenzo Sistino told ANE
that Lancia’s dealers will need to find a way to
increase floor space to accommodate this dramatic
doubling of the range. Separation of Lancia and Chrysler
by European region should also lead to a much clearer
and focused marketing strategy – the confused ‘puzzle’
themed joint stand rolled out at the Geneva Motor Show
in the spring had automotive industry watchers cringing,
and indeed had the reverse effect than that intended,
visually highlighting the fundamental differences
between the brands rather than their similarities.
According to
ANE,
Lancia currently has 795 dealers and 785 showrooms
across mainland Europe, while the Chrysler Group
(including integrated Jeep and Dodge dealers) has
approximately 556 dealers and 750 showrooms. These will
be combined and rationalised to around 1,000 retail
outlets. Chrysler and Lancia CEO Olivier François told
ANE: “Our plan is to have in place by May 2011 a
Lancia/Chrysler integrated network comprising about 800
dealers and over 1,000 dealerships.” Sistino said that
the change will benefit dealers because the combined
product portfolio of the two brands will amount to a
full lineup. “It will be a much more appealing
franchise,” he said at the Automotive Dealer Day event
in Verona last weekend.
Sistino added
that Dodge is set to become just a niche player in
Europe, importing only its muscle cars such as the
Charger and Challenger. Dodge is already seeing its
range being wound down: in the UK, where it has seen
more appeal than in many other European markets, just
one model – the Journey minivan – is still listed for
sale on its website. Sistino said that most of the
current Chrysler dealers that also sell the Jeep brand
will be given new Jeep-dedicated franchises, and where
there are geographical gaps in its European dealer
network, Fiat, Lancia and Alfa Romeo dealers will be
offered the American specialist SUV division.
